Is Democracy really all its cracked up to be? Does Hong Kong really need it? That’s the question Chris Campbell ponders today as he observes the protests in Hong Kong. Hong Kong has enjoyed low taxes, free business and trade, and high social freedom without our favored system of governing.
One CIA insider visited our Baltimore HQ yesterday. While here, he leaked 30 potential events to cause the next financial avalanche. Even more, he also gave us several ways everyday Americans can thrive because of these events. Why did he impart so much valuable information? Find out in today’s Laissez Faire Today. Read on…
Instead of letting you choose, the government has found it fit to force one potentially dangerous medication on you and your family. Where is it? In your drinking water. Even more outrageous: While Uncle Sam forces medication down your throat, he also says you have no right to choose your own milk. Chris Campbell has all the details. Read on…
ISIS’ spokesperson is a kid from Calgary who wants to “paint the White House black.” In today’s Laissez Faire Today, Chris Campbell asks one question none of the “officials” seem to care to ask: Why? Why are foreigners flocking to the Middle East to fight alongside ISIS? Why is Saudi Arabia so keen on getting involved? How far does Obama really want to go? Find out inside. Read on…
If you’ve ever wanted to expose some heinous crime against humanity, here’s your chance. In today’s Laissez Faire Today, Chris Campbell shows you how to make sure the world accesses to your leaks, even if something happens to you. Chris also shares why this is probably a terrible idea. Read on…
America has about 4% of the world’s population, yet houses 25% of the world’s incarcerated. What’s going on here? Chris Campbell digs deep into the industry to figure out the truth. While many blame the private prison industry, the real culprit, says Chris, begins right outside your door. Read on…
When Obama first announced U.S. airstrikes in Iraq, most people have no idea that it was to destroy U.S. military equipment in the hands of ISIS. How did ISIS get U.S. weapons? Chris Campbell blows the story wide open in today’s Laissez Faire Today. Read on…
Every 37 seconds, an American is arrested and criminalized because of one racist and ridiculous law. Join Chris Campbell as he takes you back to when marijuana became illegal… why it’s hurting America… and why you should fight to end the prohibition. And it’s not so you can smoke it. Read on…
Think it’s impossible to escape Obamacare? Think again. Laissez Faire Today reader David F. shares how he did it and how you can do it too. Don’t see another doctor, take another pill, or shop around for better medical insurance until you read his story. Read on…
“While I heartily subscribe to your premise of pursuing one’s dream,” one reader, Donald J., wrote, “there are alternate perspectives worth considering.”[We’re listening… go on.]“Some wiseguy once said that life is what happens to you while you’re waiting for something better to come along. Milton put it a little more poetically in one of his […]
“Where were you when it happened?” How many times have we been asked -- and asked -- this question since 2001? Today, Chris Campbell asks us to pose a different question: What can I do today to making Sept. 11 another turning point in my life? And then, of course, taking that first step. Read on…
Want to get rich? Don’t listen to financial “gurus,” says Chris Campbell. In today’s Laissez Faire Today, Chris shares a Zen proverb and shows how understanding it is the only real way to get rich (and live a rich life). Read on…
Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” In today’s Laissez Faire Today, you’ll learn about one FREE website that has the potential to not only keep your family safe – but also open your eyes to what’s happening in your own neighborhood. Chris Campbell has all the details. Read on…
Hundreds of pictures of nude celebrities were leaked onto the Internet last week. The mainstream is blaming twenty-something hackers, but according to Chris Campbell, everyone must’ve already forgotten what we learned about the NSA only a year ago. Read on…
The fireflies along the tidal rivers of Malaysia show "feats of synchrony that occur spontaneously, almost as if nature has an eerie yearning for order." Chris Campbell tells you where else this might occur in the world. Also, new technology may revolutionize the agriculture industry and what we think of as a farm.
Jeff Davis is running for Governor in Hawaii and has an interesting campaign strategy. Also, what motivates hackers is revealed and the findings might surprise you. Finally, Ferguson is discussed in a new light. Chris Campbell has more...
The so-called recovery is only built on debt and printed cash declares our own Byron King. In the long term, the only option for the government to continue financing it's operations is to print too many dollars. Money printing has it's limits, however. It's Byron's opinion that at some point, perhaps very soon, the government will have to turn to more desperate measures. Namely, capital controls. In the following featured essay, Byron outlines 4 probably ways the government will take your cash and one play you can buy through your broker to prepare today. Read on...
Americans expatriate because they want to get out of the country. Corporations expatriate for similar reasons. Clem Chambers explains...
Say goodbye to your boring morning commute. New technologies are changing the way people drive their cars. It’s making them safer, more fuel efficient, and could reshape the way America builds its roads and cities. The only thing that could stand in the way...
In a 2009 article, the Huffington Post went into considerable detail about the number of people with PhD degrees in economics employed by the Board of Governors of the Federal Reserve System. This is the government’s branch of the Federal Reserve. It is not one of the 12 regional Federal Reserve banks, all of which […]
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in […]
When the NSA surveillance news broke last year it sent shockwaves through CERN, the particle physics laboratory in Switzerland. Andy Yen, a PhD student, took to the Young at CERN Facebook group with a simple message: “I am very concerned about the privacy issue, and I was wondering what I could do about it.”There was […]
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance or the get-rich-quick adventurer. They will die poor.– Jesse Livermore, How to Trade in StocksThe trouble with capitalism’s guardians is that they have no […]
Let’s head back in time…In 2004, a mere decade ago, the US national debt rang the register at $7.4 trillion. That represents “debt per citizen” of over $25,000. You, me, your neighbor, your 4-yr old grandson, you name it and they’re portion of the U.S. debt is $25k.But flash forward to today and you’ll see […]
John Foust, a Democrat running for the 10th congressional seat in Northern Virginia, is — like Gov. Terry McAuliffe and other state Democrats — gung-ho to expand Medicaid. His wife’s position is, shall we say, a bit more nuanced.Foust has slammed his opponent, Republican Del. Barbara Comstock, for her opposition to expansion. He has spoken […]
The midterm election season is upon us, and it’s a tossup whether the Republicans will win the Senate, or if President Obama, seemingly oblivious as conflict flares up around the world, will, through his continuous campaigning, keep Harry Reid in his majority leader seat.The only thing we know for sure is that sociopaths will be […]
Alexander Hamilton was America’s first Secretary of Treasury under President George Washington. When he first entered office in 1789, America was an agricultural nation of just 4 million still broke from its financially costly victory over the British Empire in the Revolutionary War.The states had accumulated relatively massive debts to finance that war, which mostly […]
In today’s political climate, the more implausible the claim, the more likely it is to stick. One that seems to be sticking now is that government today is small by historical standards and constantly shrinking.
Run that one by the man on the street — looted by the tax man, harassed by police, hounded by regulators — and he will scoff. Now comes the highbrow journalist with a nuanced view to correct him, citing all kinds of complex data.
The highbrow in this case is Catherine Rampell, writing in The New York Times. Her claim seems apodictically certain. “Government has been shrinking steadily for two years,” she says, “and compared to the size of the overall economy, government is actually slightly smaller today than it has been on average in the postwar era.”
Huh? Well, she provides data of “the percentage change in total government spending and investment” as compared with the change in the GDP. She shows GDP rises and government falls. Wow, amazing.
Not so fast. You can always know that when people claim that government is small, it will always appear small by comparison to the GDP, which is to say that anything looks small by comparison to anything (in the words of economist Roger Garrison).
Moreover, it is a peculiar presumption that government should always grow in proportion to the wealth of society (presuming that GDP does measure that). Why? If government is providing essential and minimal functions only, it should get smaller in proportion to economic growth. Should the thief keep coming back for more when his victim grows wealthier?
Also, shrinking by comparison to everything else doesn’t mean that it literally gets smaller. It should only constitute a smaller portion of the total.
But that’s only the beginning of Rampell’s statistical antics. If you compare federal government spending as a percentage of GDP, it comes in at 24.3%, which is the highest in postwar history. In fact, it is the same as 1942, the year American troops landed in Europe.
So what is she talking about? Is she just making stuff up? Not exactly. She carefully says that she is looking at “the percentage change in total government spending and investment.” More precisely, she is examining something called “government consumption expenditures and total investment,” one of the ways that you can slice and dice national income accounting. This is the figure among many options that best makes her case. Piles of data had to be thrown in the trash can to generate the result she wanted.
As AmosWEB points out, this figure is the only one that completely excludes transfer payments, which are defined (arbitrarily) as not investment and not consumption, and includes all those things that (arbitrarily) fall into a specific category. It’s a bit like saying that a giraffe is a horse if you exclude the neck.
Rampell even took the manipulation one step further to look at quarterly change in the data, and not the actual figure. Therefore, if government spends a trillion on a stimulus now and that stimulus runs out next year, it would seem to show a crash in spending. Surprise, that’s exactly what happened!
Despite her rhetoric, then, we can see that she had to engage in three levels of distortion to come up with the claim that government is shrinking.
Let’s say that we look at what most normal people would consider government spending, by which I mean… the dollar figures on how much government actually spends. And let’s add a column on debt so we can see the total unfulfilled commitments in the year in question too. There is nothing fancy pants here, just the raw truth, year by year.
|Year||Fed government spending||Fed government debt|
|2001||$1.979 trillion||$5.812 trillion|
|2002||$2.112 trillion||$6.192 trillion|
|2003||$2.261 trillion||$6.728 trillion|
|2004||$2.393 trillion||$7.345 trillion|
|2005||$2.573 trillion||$7.929 trillion|
|2006||$2.728 trillion||$8.494 trillion|
|2007||$2.900 trillion||$8.989 trillion|
|2008||$3.116 trillion||$9.914 trillion|
|2009||$3.456 trillion||$11.723 trillion|
|2010||$3.703 trillion||$13.390 trillion|
|2011||$3.757 trillion||$14.656 trillion|
Now, I ask you: Does this look like steady shrinking to you?
In other words, the man of the street is exactly right. Think about these numbers when you hear pundits and politicians over the next months tell you how dramatically government is shrinking.
Of course, spending alone doesn’t measure government size. If your front door is being broken down by feds, if you are jailed for violating regulations, if you are prevented from starting a business or if you can’t hire new workers because of the high costs, government is effectively totalitarian from your point of view. In the last 10 years, this is largest change we’ve seen, from big government to police state. In the end, this is a change that no data set can quite capture.